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Dim Asian Economies Casting Shadows in U.S.

Two freighters carrying logs from the Weyerhaeuser Corporation in the Pacific Northwest steam idly at sea near South Korea, their cargos undelivered -- perhaps undeliverable. Just as the ships approached port, the Korean buyers refused to pay for wood they no longer needed to build homes and furniture they can no longer sell while Asia's financial crisis spreads.

Tiffany, enjoying brisk jewelry sales on Fifth Avenue, is hurting in Hawaii; the Japanese tourists who normally visit and buy there are doing neither lately. And Reebok International, the shoe giant, reports that its sales to Asia's consumers are way off. Take the Rockport shoe boutique, a Reebok subsidiary, in Seoul's upscale Myondong neighborhood. With few customers to serve, sales clerks spend their time shining the shoes on display.

''People come in here and they realize this is an American brand and they don't buy,'' said Kim Myung Chal, the store manager.

Hundreds of stories like these are bringing the Asian financial crisis home to corporate America. So far, the effects have been small for most companies. Weyerhaeuser, Tiffany and Reebok may be hurting in the Pacific, but their sales worldwide are still rising. And added together, all the setbacks at worst only seem to be nibbling at the overall United States economy. Some companies even expect to profit from the turmoil by selling products in America that are ever cheaper to make in Asia with the region's falling currencies.

The national economy, in the view of many experts, is simply too big and too complex to be brought down by what has happened so far in Asia. ''My line is always America has 130 million workers,'' said Paul Krugman, an economist at the Massachusetts Institute of Technology. ''You can go out there and find stories that affect a thousand companies and a million workers, and it is still not important in the larger picture.''

But while the effect thus far appears to be marginal for most American companies -- a Weyerhaeuser official, for example, says the undelivered logs might cost the company several hundred thousand dollars, a pittance for a company with more than $11 billion in annual revenue -- the cumulative effect on the American economy as a whole could be harsh in the end.

Some of the damage might even show up at first as good news for consumers in the form of falling prices for Asian goods sold in America. But more Asian imports -- and they are already rising -- could swell the United States trade deficit to a damaging level and shrink American operations that make similar goods -- textiles, electronics and furniture for instance -- or push companies to move more operations abroad.

''It accelerates the move offshore; that is the bad news,'' said Jay Meltzer, director of Johnson Redbook Service, which compiles retail data. ''And the good news is that it puts the kibosh on inflation. Every apparel company that I speak to talks of doing more sourcing offshore, and particularly now in Asia.''

Many forecasters expect the Asian crisis to slow the growth of the American economy by only half a percentage point, to about 2.5 percent in 1998. But a few are talking about a decline of one percentage point, enough to cut back job creation and make the low unemployment rate edge up gradually.

The global trade agreement signed by 100 countries in Geneva yesterday -- committing them to dismantle barriers to foreign ownership of their banks and security firms -- could soften the impact on the American economy. The prospect that a Chase or a Citibank could soon take over a failing bank in Korea or Thailand might restore the confidence of foreign investors in these economies, some analysts say. The Asian currencies would then regain some of their lost value, and that in turn would reduce the pressure on American companies trying to compete with inexpensive Asian imports.

There is a more dire scenario -- that the panic in Asia becomes infectious, scaring American investors sufficiently to bring down stock prices. That would make millions of Americans feel less wealthy, undermining the consumer confidence that has sustained two years of strong economic growth.

''The Asian crisis, although a small thing, becomes the pin that pricks the stock market bubble in America, assuming there is a bubble,'' Mr. Krugman said.

In the meantime, the tales of damage to American businesses are accumulating. With Asians traveling less, passenger traffic on Pacific airline routes is growing at half the rate of last fall, shaving potential revenue from American carriers. Rubbermaid, which sells high-priced plastic toys in Asia, says sales are holding up surprisingly well, but they are in local currencies that translate into fewer and fewer dollars, also cutting into revenue.

Some of the hits are not so marginal. The Oracle Corporation, blaming Asia for a sharp decline in sales of the company's specialized software, saw the value of its stock decline by 29 percent last Tuesday -- a reminder that the prospect of falling profits can be deadly on the stock exchange. And in recent months, mutual funds that invest in Asian securities have shrunk in value by $5.5 billion.

Most big American companies are playing down the significance of their losses. The Chase Manhattan Corporation, the nation's largest bank, buys and sells Asian bonds, a bit of trading that cost it $160 million in October, the company said. Citibank, J. P. Morgan & Company and Bankers Trust New York have reported similar losses, and these are likely to show up in fourth-quarter results as slightly lower-than-expected profits.

''The one thing we are proud of,'' a Chase official said, by way of rationalization, ''is that through all this turmoil, we are at least making a market in Asian securities, protecting a rich franchise for the long term.''

Some companies are turning a profit unexpectedly, or balancing a loss in one area with a profit in another. The Eaton Corporation, a manufacturer of machinery controls in Cleveland, also makes rubber hand grips for golf clubs in Thailand. The grips are sold worldwide in dollars, while the costs are in Thai bahts, a currency whose rapid decline in value set off the Asian crisis last July.

''It is a short-term benefit; sooner or later inflation in Thailand will overtake the devaluation, and our costs will rise, but not right away,'' said Stephen R. Hardis, Eaton's chairman. Meanwhile, buyers of Eaton's machinery controls in Asia have not cut back orders, although Mr. Hardis says he is bracing for that to happen.

Western Digital of Irvine, Calif., is another case in point. Western makes most of its disk drives in Singapore and Malaysia, selling 10 percent to 15 percent in Asia and the rest in the United States and other foreign markets. Sales in Asia have fallen, but profits are rising. The disk drives are sold in dollars, while manufacturing costs are incurred in the weakening Asian currencies.

''We are on both sides of the profit and loss equation,'' said Duston Williams, Western Digital's chief financial officer, adding that the net result has been higher profit so far.

That equation also applies to Rockport, which makes casual shoes in China and Indonesia for sale not only in Asia -- only 15 percent of its market -- but also in the United States, which accounts for two-thirds of its sales. The Asian sales are collapsing: The owner of the Seoul store is having so much trouble selling Rockports that he intends to switch soon to a non-American brand. But the cost of manufacturing Rockport shoes is falling, while the price of shoes in America is not, at least not yet.

''We have seen a softening of our sales throughout Asia,'' said Kenneth Marshall, a Rockport senior vice president, ''but to a certain extent the currency devaluation has been favorable to us from a sourcing point of view.''

Car sales are also falling in Asia. For the Chrysler Corporation, the percentage decline is steep but the number of vehicles is relatively small: a 31 percent drop in November to 59,000 vehicles sold so far this year out of worldwide sales of 2.8 million. But pressure is growing to offset this loss by selling more cars in strong markets, particularly the United States, perhaps through discounts and price cuts that shrink profits.

That kind of pressure, multiplied across corporate America, could result in job cutbacks and slower economic growth. But many American executives are optimistic.

''The downward pressure in Asia means a greater competitive environment in North America,'' said Wynn Van Bussman, a Chrysler economist, ''but only a temporary dent in our plans to expand across the world.''